Equistone Partners Europe completes sale of Hornschuch to Continental

Funds managed by Equistone Partners Europe (“Equistone”), one of Europe’s leading mid-market private equity investors, successfully completed the sale of Konrad Hornschuch AG (“Hornschuch”) to Continental on 1 March 2017, selling their majority holding in the business alongside Hornschuch management’s sale of the remaining minority stake. The responsible competition authorities had previously unconditionally approved the agreement of October 2016. The company value and market position of the Weißbach-based surface specialist have undergone substantial improvement in recent years.

• Competition authorities approve acquisition
• Substantially stronger surface specialist becomes part of Benecke-Kaliko

Following the acquisition of an 80% stake in Hornschuch by Equistone Partners Europe (then Barclays Private Equity) in 2008, the company’s turnover rose from €140 million to approximately €450 million in 2016. Through its ambitious buy-and-build strategy, Hornschuch acquired two companies in Germany and one in the US, significantly expanded its product portfolio, and built new production sites. With Equistone’s support, the company was able to successfully address the consequences of the financial crisis and maintain a sustainable growth trajectory. The highly-anticipated exit provides further evidence of the successful and enterprising approach of the equity investor.

Michael H. Bork, Managing Director and Senior Partner of Equistone Partners Europe, said: “Equistone focuses on the sustainable success of its investee companies. In the case of Hornschuch, our primary objective was to optimize its market position through process and product innovations as well as through targeted innovations. Together with the management and employees we were able, over eight years, to substantially strengthen the company as a leading and innovative surface specialist. We are confident that Hornschuch will continue to grow as part of the Continental Group and are pleased to have successfully completed the transaction thanks to the work of all those involved.”

Founded in 1898, the Hornschuch Group, which has 1800 employees and produces design, functional, foam and compact foils as well as artificial leather for industrial and automotive applications, will now be integrated into Benecke-Kaliko AG, part of the Continental division ContiTech, and will thus become part of a leading international industrial group. For both companies the merger means a range of synergies in the areas of research and development as well as purchasing. This is the largest acquisition in Benecke-Kaliko’s almost-300-year-history and will help to ensure that the growth of the industrial business is brought into line with that of the automotive business, and that new markets can be opened up. Benecke-Kaliko develops and produces surface materials for passenger, commercial, and off-highway vehicles and for other important industries. Annual turnover is just under €550 million (2015).

Alongside the sale of Hornschuch, Equistone‘s DACH team successfully completed a total of twelve other transactions in 2016, equalling the firm’s record year of 2015, whilst market conditions for further M&A activity in 2017 remain positive. Michael H. Bork and Stefan Maser led the transaction for Equistone.